Below are the relevant extracts from the report. The full report is attached.
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Report by the Local Government OmbudsmanInvestigation into a complaint against
Bury Metropolitan Borough Council
(reference number: 13 019 267)
22 July 2015Key to names used
Mr B - the first complainant
Mr C - the second complainant
Mr D - the third complainant (and representative of Mr B and Mr C)
Report summaryCouncil TaxMr D complains on behalf of Mr B and Mr C about the actions of a bailiff employed by Rossendales (a company of enforcement agents) instructed by the Council to collect council tax arrears owed by Mr B. In December 2013 the bailiff visited Mr B while he was staying with Mr C and threatened to remove and sell goods owned by Mr C to clear the debt. Mr C paid Mr B’s debt, but Mr D says this was only under duress.
FindingFault found causing injustice and recommendations made.
RecommendationsThe Council has agreed to:
- refund Mr C the money he paid on behalf of Mr B; it should also apologise to him for the distress its actions caused and pay him an additional £250 in recognition of this;
- write-off any remaining council tax debt owed by Mr B’s estate;
- apologise to Mr D;
- introduce a policy that it will review video footage shot by bailiffs where this is available and might be relevant to a complaint;
- review its current approach to the seizure of third party goods by bailiffs; we recommend a re-wording to reflect a more balanced approach when a bailiff is on third party property in line with comments made in the body of the report.
We further recommend that it:
- pay Mr D £250 in recognition of the distress caused by its bailiff;
- provide satisfactory proof that Rossendales has addressed with its bailiffs those parts of the Greater Manchester Consortium Agreement and associated documents (including the Code of Conduct) that were not followed on this occasion; it should provide evidence that Rossendales has taken action to ensure all its bailiffs know those parts of the Code covering courtesy; identification; proper adherence to Data Protection Act principles and the correct approach to seizure of third party goods.
2 Introduction1. Mr D complains on behalf of Mr B and Mr C. Mr B owed council tax arrears to the Council. It instructed Rossendales, a company of enforcement agents (bailiffs) to collect these. At the time Rossendales became involved Mr B’s mortgage lender had repossessed the home for which he owed council tax. He was therefore staying with his friend, Mr C. One of Rossendales’ bailiffs visited Mr B while he was alone at Mr C’s home. During that visit Mr C and Mr D also arrived at the property in response to telephone calls from Mr B. They
jointly complained about the conduct of the bailiff during the visit. Mr D says the bailiff was rude (including personally insulting him); refused to show identification (ID) and refused to discuss Mr B’s circumstances. He also says the bailiff wrongly threatened to remove goods at the house which belonged to Mr C. In the end Mr C settled the debt as Mr B had no funds to do so, but Mr D argues he only did this under duress as the bailiff was at that point threatening to take goods from the property.
Legal and administrative backgroundThe law concerning bailiffs and council tax2. Where a sum of council tax is unpaid the Council may seek an order from the Magistrates Court known as a liability order. This confirms the amount owed and who is liable to pay it. The Council then has several choices available to try to pursue the debt, one of which is instructing bailiffs (Regulation 45 of The Council Tax (Administration and Enforcement) Regulations 1992). When collecting council tax arrears, bailiffs may identify goods they can remove and sell to pay the debt; known as a ‘levy of distress’. Another option a council can pursue is an Attachment of Benefits. It can apply to the Department of Work and Pensions to deduct money from certain benefits including Job Seekers Allowance (JSA).
3. The law about bailiffs is a combination of statute law, case law and common law. The Tribunals, Courts and Enforcement Act 2007 made major changes to the law; bringing together in one unified system enforcement for rent, local taxation, parking or debt recoverable in the county or high court by ‘taking control of goods’. However the Act did not take effect until April 2014. This post-dates the events covered by this complaint.
4. The Ombudsman investigates complaints about councils and certain other bodies. Where an individual, organisation or private company (such as a bailiff) is providing services on behalf of a council, the Ombudsman can investigate complaints about the action of these providers. (Local Government Act 1974, section 25(7))
The law concerning bailiff’s powers and the seizure of goods belonging to third parties5. A bailiff cannot usually take goods belonging to anyone other than the debtor. However, a bailiff can attend a third party’s property if they believe the debtor’s goods are there (see Ratcliffe v Burton (1802) quoted by ‘Law of Seizure of Goods’ by John Kruse 2009). A bailiff can enter a third party’s property peaceably to search for a debtor’s goods (see Biscop v White (1600) – source as above).
6. If a bailiff seizes goods belonging to a third party, the law allows for that third party to try
and reclaim goods wrongly taken. This is by application to the Courts and a procedure
known as “interpleader”. In brief the third party declares to a Court that the goods belong
to them. The bailiff can contest the claim and if they do so, a Judge can decide the issue
based on evidence presented by both parties. Since April 2014 the procedure has
required the third party to first present details of their claim to the bailiff (Civil Procedure
Rules 85).
The Council’s contractual relationship with its bailiffs7. The Council was one of nine authorities in Greater Manchester that commissioned bailiff services jointly. The nine authorities were signatories to “Greater Manchester Consortium – Provision of Bailiff Services Document”. This set out that the authorities jointly commissioned services from three bailiff companies including Rossendales, which the Council had used for almost 40 years. Since the events covered by this complaint the Greater Manchester Consortium has ceased to exist and councils in the region now commission bailiff services separately.
8. Among other matters the Provision of Bailiff Services Document said:
- the Contractor shall at all times carry out all instructions and perform the Service in accordance with the Contract, Specification and standards, including the Greater Manchester Consortium Code of Practice (point 4.3).
- the Contractor shall ensure that the bailiffs carry an identity card at all times when providing the service and produce such card to the debtor without being asked and also show such card to any person who has reason to require to see such card on request. Any personnel of the Contractor shall disclose her/his identity and status as personnel of the Contractor and shall not attempt to avoid so doing (9.3).
- the Contractor will be expected to deal with all complaints received in a prompt, courteous and effective manner, either verbally or in writing, as appropriate. A response to all complaints must be made within seven working days of receipt (21.3).
9. A supplementary agreement referred to the collection of liability orders. Among other
matters this said:
- the Council’s approach to debt recovery is “firm, but fair”. In this context it must be accepted that bailiff action will be seen as a last option. Prior to cases being issued to the Contractor, Council revenues staff will make all reasonable and diligent efforts to find an alternative method of recovery, using all available paper records and computer based records (point 1.1).
- the Contractor will be expected to explore all avenues before seizure of goods is carried out. This does not mean that the Council will not authorise the seizure of goods, but that the Contractor must be absolutely sure that no other course of action will successfully recover the debt and any outstanding fees (1.2).
- all Contractor’s employees must refrain from any action which is likely to bring the Council into disrepute, regardless of provocation, they must be courteous at all times and deal with debtors in a firm but humane and fair manner (2.3).
- all Contractor’s employees must remember at all times that they are acting on behalf of the Council and as such, their behaviour, appearance and attitude must be in keeping with the high customer service standards demanded by the Council (2.4).
- the authorisation of the Council and the bailiff’s identity card must be carried at all times and produced to the debtor without being asked and the Contractor's employees will also show such identification to any person who has reason to require it (2.5).
- the Contractor will be aware of the sensitive nature of distress for local revenue collection. The bailiff should at all times use his professional judgement and enquire back to the Council for further advice if he/she considers that due to the personal circumstances of the debtor, it would be inappropriate to proceed to levy distress.
Particularly, if the following circumstances are encountered:
- Income Support/Income-Based Jobseekers Allowance – the debtor provides proof that they or their partner is in receipt of Income Support or Income-Based Jobseekers Allowance and provides details of their National Insurance number.
- Unemployment - this includes debtors or their partners who do not earn a wage. This does not apply if one of a couple is working (4.1).
- only goods belonging to the debtor may be seized. Should any situation arise where the ownership of goods is disputed, e.g. subject to a hire purchase or rental agreement or the goods are claimed to be owned by somebody other than the debtor named on the Liability Order, the Contractor shall obtain proof of alternative ownership from the debtor ( 4.8 ).
10. Further there is also the ‘Bailiff Code of Practice’ referred to at paragraph 8 above. Amongst other matters this says:
- bailiffs/bailiff and employees, contractors and agents of the bailiff firm must be aware that they represent the Council in their dealings with debtors. They should at all times act lawfully and in accordance with the provisions of the Local Government Finance Act 1992. They should also act in a responsible, professional and courteous manner and be aware that their behaviour, appearance and attitude have a great influence on
the success of the debt recovery process (point 6).
- the bailiff must adopt a firm but correct attitude when dealing with the public, they must be polite and courteous and avoid being provoked by vexatious debtors. In the event of a breach of the peace occurring as a result of a bailiff visit, the Council must be debriefed of the circumstances as soon as practicable (point 7).
- the bailiff must comply with Data Protection legislation where applicable and should be aware of the relevant Articles in Human Rights legislation ( 8 ).
- the bailiff should at all times use his professional judgement to refer back to the Council if he considers that, due to the personal circumstances of the debtor, it would be inappropriate to proceed to levy distress. In particular, cases such as: […] is unemployed and provides proof that they are in receipt of Income Support or Job Seekers Allowance or Pension Credit from the DWP and details are obtained of the debtors N.I. number. (point 14)(emphasis as per original)
- only goods belonging to the debtor may be seized, goods subject to H.P. or credit sale will not be removed in accordance with the Consumer Credits Act 1974 (point 19).
Continued...